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Are insurance companies starting to raise deductibles on home policies? Jan 7

 Insurance Do you know the story of the canary in the coal mine? When miners carried caged canaries into the mines and the odorless carbon monoxide killed the birds, it was time for the miners to flee.

Constellation Brands, Inc.
The canary in the coal mine means to give the first warning about something before anyone knows about it.

Jay Calvert of Frisco is the cannery in this story. He was the first to alert The Watchdog that his insurer, Farmers Insurance Group, has increased the minimum deductible for wind and hail damage from 1% to 1.5%. He wonders if this is a trend.

He 0.5 point increase in deductible may not sound like a big deal, but it is a big deal for homeowners looking to replace their roof after a hail storm. In some cases, out-of-pocket costs must be paid before the insurance company pays the balance of the replacement or repair.

Deductible is based on actual coverage percentage of total home at time of claim. If your home is insured for $400,000, the 1% deduction is $4,000. But at 1.5%, it's $6,000.

I'm not sure about your financial situation, but after you pay your property taxes, you don't have thousands of dollars left to pay for a new roof that your insurance company has to cover.

A general rule: the higher the deductible, the lower the premium for the rest of the policy.
In Texas, wind/hail deductibles are excluded from all other peril insurances. Therefore, you may need to select the respective deduction amount.

Listen to Jay first and you'll know if it's true. Here are some ideas to help you save money.

Cutting edge of trends?
This watchdog investigation began when Jay's son-in-law noticed an increase in the farmer's landlord's renewal fees. His son-in-law called the farmer's agency and was told the price increase was for the Dallas-Fort Worth area.

Jay called the farmer's agent to confirm this. he heard it "They actually told me they had to do it to keep their profits because of the hail damage over the past year," he recalls.

I don't want to give the impression that no one is raising prices. The deductible is between 1% and 5%, depending on the company.

The Texas Department of Insurance will approve premium increase requests, but not deductibles.

Weir vs. Texas Watch. Wendell, an Austin-based consumer awareness group on insurance issues, told me that Jay's insights are in the "kinship" of possible trends.
He fears the increase will spread across the industry.

up to 5% deductible
I've spoken to heads of the insurance industry, but first I wanted to share what Farmers Insurance spokesman Louis Sahagun told me after he sent Jay's letter. increase.

Due to the increased cost of hail and wind damage in the Dallas/Fort Worth area, he confirmed that the minimum deductible for hail and wind has been "adjusted." It came into force in July.

“We believe this adjustment is in line with market conditions and will help us remain competitive,” he added.

What are other people saying? said that Gardner Selby, a senior researcher at the
 Department of Insurance, said that if a company were to increase deductibles at renewal, policyholders would need to be given at least 30 days' notice.

Notices must be written in plain language and placed on the first page.

"Some companies may make changes to find ways to limit future losses," said Richard Johnson of the Texas Insurance Council. He said there have been no major hail storms in the area recently.

The Dallas area has had three hail storms this year, six in the past year, one in 2020 and five in 2019, according to Stormsite.com. Customers can choose to deduct up to 5%.

Texas Watch's Wendell said the Texas Department of Health should support price increases and companies should lower premiums if they raise deductibles.
Extra Tips
State offers a website www.helpinsure.com. State insurance departments maintain records of business valuations, complaints, and licenses.

Consumer Reports suggests asking your insurance agent how much your premiums will go up and how many years it will take before making a claim over the deductible. According to Consumer Reports, "If the insurance payout exceeds the number of years covered by the annual coverage, it may make economic sense to claim." covers one event. If you have two charges, you will have to pay them twice.

If you feel you need a new roof, get it before your current insurance expires, says Jai.

The most important tip is to look for better prices with more coverage rather than less coverage.

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